Compound interest calculator
Project how your savings grow: regular contributions, the share of interest year by year, and the value adjusted for inflation.
Your investment
Annual return
Expected average return, before inflation.
Effective annual rate: 5.00%
How your investment grows
The green band is the interest: what time earns for you.
Year by year
| Year | Cumulative contributions | Interest for the year | Cumulative interest | Balance |
|---|---|---|---|---|
| 1 | $2,400 | $55 | $55 | $2,455 |
| 2 | $4,800 | $177 | $232 | $5,032 |
| 3 | $7,200 | $306 | $538 | $7,738 |
| 4 | $9,600 | $441 | $979 | $10,579 |
| 5 | $12,000 | $583 | $1,563 | $13,563 |
| 6 | $14,400 | $733 | $2,295 | $16,695 |
| 7 | $16,800 | $889 | $3,185 | $19,985 |
| 8 | $19,200 | $1,054 | $4,238 | $23,438 |
| 9 | $21,600 | $1,226 | $5,465 | $27,065 |
| 10 | $24,000 | $1,408 | $6,873 | $30,873 |
| 11 | $26,400 | $1,598 | $8,471 | $34,871 |
| 12 | $28,800 | $1,798 | $10,269 | $39,069 |
| 13 | $31,200 | $2,008 | $12,277 | $43,477 |
| 14 | $33,600 | $2,228 | $14,505 | $48,105 |
| 15 | $36,000 | $2,460 | $16,965 | $52,965 |
| 16 | $38,400 | $2,703 | $19,668 | $58,068 |
| 17 | $40,800 | $2,958 | $22,626 | $63,426 |
| 18 | $43,200 | $3,226 | $25,851 | $69,051 |
| 19 | $45,600 | $3,507 | $29,358 | $74,958 |
| 20 | $48,000 | $3,802 | $33,161 | $81,161 |
| 21 | $50,400 | $4,113 | $37,273 | $87,673 |
| 22 | $52,800 | $4,438 | $41,712 | $94,512 |
| 23 | $55,200 | $4,780 | $46,492 | $101,692 |
| 24 | $57,600 | $5,139 | $51,631 | $109,231 |
| 25 | $60,000 | $5,516 | $57,147 | $117,147 |
The snowball effect of saving
Compound interest is often called the most powerful force in personal finance, and with reason. Every dollar of interest earned joins your capital and starts earning interest of its own. Early on the effect is quiet; over the years it becomes spectacular. Over 25 years, it is not unusual for the interest earned to exceed everything you put in.
This tool makes that effect visible. You enter a starting amount, a regular contribution, a rate of return and a time horizon; it shows you the final value, the share that came out of your pocket, and the share time earned for you.
How the tool calculates your growth
The simulation moves month by month. Each month, accrued interest is added to the balance, then your contribution is deposited at the end of the period: the most conservative assumption. The monthly rate is derived from the annual rate and the compounding frequency you choose, so the result faithfully reflects the real effective rate of your investment.
Nothing is sent or stored: everything is calculated in your browser, in real time, as you adjust the settings.
Compounding frequency: how much does it really change?
Compounding more often does increase the return, but the gap is smaller than people imagine. At a nominal 5%, moving from annual to daily compounding takes the effective rate from exactly 5% to about 5.13%. That is a real gain, but a small one next to the two dominant levers: the rate itself, and the time you let the money work. Starting early and contributing regularly matters far more than chasing the most frequent compounding.
Why look at the value in today's dollars
An amount projected 20 or 30 years out is misleading: inflation eats purchasing power year after year. At 2% inflation, the Bank of Canada's target, prices roughly double every 35 years. The "adjust for inflation" option converts your final value into today's dollars: that is the number to look at if you want to know what your savings will actually let you do, not just what a statement will show.
Frequently asked questions
With simple interest, you earn interest only on the capital you invested. With compound interest, the interest you earn joins the balance and starts earning interest of its own. That cumulative effect is what makes an investment grow faster and faster over time: the curve accelerates instead of rising in a straight line.
The compounding frequency says how often interest is added to the balance (yearly, monthly, daily and so on): it is a feature of the investment. The contribution frequency says how often you add money: it is your saving habit. The tool combines the two correctly, whichever pair you choose.
At the end. Each month the tool first adds the accrued interest, then your contribution. A contribution made today therefore starts earning interest the following month. It is the most conservative assumption, and the most common one in financial calculators.
Yes, but less than people think. At the same nominal rate, compounding more often raises the effective annual rate. For example, 5% compounded daily works out to about 5.13% compounded annually. The gap is real but small: the dominant factors remain the rate itself and, above all, time.
It is the final value corrected for inflation: what your future amount will actually buy, expressed in today’s purchasing power. A million in 30 years is not a million today. The tool discounts the final value using the inflation rate you choose, to give a more honest number.
It depends on the investment. A high-interest savings account pays a few percent; a diversified stock portfolio has historically returned 6 to 8% a year before inflation, with no guarantee and plenty of ups and downs. Use a conservative assumption, and compare several scenarios rather than trusting a single number.
No. Everything is calculated in your browser, nothing is sent or stored. Reload the page and the tool starts again from its default values.